Seller Financing possible with Existing Mortgage?

Question

Is it possible to do a seller finance with a balloon payment due in 5 years if you still have a mortgage on the property?

Account Closed · Answer

For my answer I'm assuming you are the buyer. With an exsting mortgage you may want to see if the seller will do a lease option. There are many different ways that a lease option can be structured but basically you are leasing the property from the seller for a specified period of time (5 years). Paying a agreed apon fee during this time and having the option to purchase the property at the end of the lease. The lease fees may or may not be credited to the purchase price depending on your agreement. There are risks for both sides and for you the renter one being if the seller defaults on their mortgage payments you may end up with no option at all.

This is one possible option since having an existing mortgage makes seller financing a bit more complicated. This option helps to avoid some of the legal work/implications.

Kesete Thompkins · Answer

@Jason Evans, I'm in a similar situation right now where I'm trying to figure out how to grab a property via creative financing that still has a mortgage on it. @Kevin Marshall makes great points, and I agree with his thinking. After speaking with several people in the forums, I believe that I'm going to try to do a Master Lease option to ensure that I can get the property without involving a private lender. It's possible, but complicated. For me, I'm going to do a title search on the property as well to ensure that I know exactly what I'm walking into. With something like this, I don't want any surprises.